BACKFLOW COMPREHENSIVE STUDY
GUIDE 2026 FULL QUESTIONS AND
SOLUTIONS GRADED A+
◍ Multiple Stakeholder view.
Answer: says there are other stakeholders besides just shareholders because
they only provide one type of resource. you need to pay attention to all
stakeholders that provide a resource too-this is a more holistic approach but
you can't please everyone
◍ in Multiple Stakeholder view Organizational performance is evaluated.
Answer: evaluated relative to the preferences and desires of stakeholders
that provide resources to a firm- Stakeholders= customers, labor,
management, top executives, suppliers, partners, equity holders, and society
at largebut there are conflicting performance assessments• E.g.food
consumers want low price but nutrition, safe andenvironmentally produced
foods, while food stockholders (managers) prefer high stock returns-
Typically, firms focus on key stakeholder groups and ignore the rest
◍ strengths/weaknesses of Multiple Stakeholder view.
Answer: • Strengths- Closest to definition of performance• Value creation
from diverse resource contributions - Use of diverse measures• Limitations-
No single measure is adequate- Difficulty to implement a coherent strategy,
asits performance differs pending on perspective of stakeholder group
◍ In the article titled Obama attacks the healthcare industry, the individual
mandate requires that all
U. S. citizens must purchase health care insurance. Is this mandate
consistent with the goals of a perfectly competitive market, agree or
disagree, explain. You need to think about competitive markets in terms
beyond its market structure.
, Answer: I don't agree that it is consistent— Perfectly competitive markets
require no government intervention— individual mandate violates this—
competitive market is based on voluntary exchange, individuals have the
freedom to buy/sell what they want— this is violated since he is mandating
which makes it not free market process
◍ ($15 wage) As agribusiness is influenced by political intervention, what are
the longer term implication of a "$15 mandate" on the food retail industry
and that of its workers?.
Answer: higher costs of foodlayoffs
◍ Simple Accounting Measures (SAM).
Answer: • Accounting measures of performance available from annual
reports- simpler because it has numbers- Based on historical firm
performance (financial statements: I/S, B/S, C/F)- E.g. Profitability ratios•
ROA, ROE, P/E ratio etc (Table 2.3, 33)
◍ In class we applied the SCP framework to "OPEC oil cut" case and found
that a reduction of oil is likely to generate a greater performance for the oil
industry than the grain / ethanol industry. This prediction is based on a
particularly strong assumption. Identify and explain what this assumption
is? Express this assumption mathematically also. Again, please write out the
variable names in full when presenting this mathematical assumption..
Answer: The assumption is that we assume all firms are homogeneous
(product the same)Each firm produces on average the same amount q=Q/n
◍ Limitations of SAM.
Answer: - Discretion in reporting of accounting information- Falsifying
Profit performance: different methods to value revenue, inventory,
depreciation- often accounting scams in big public companies - Fails to
value intangible resources E.g. human and knowledge capital, trust,
goodwill, brand awareness (doesn't measure mcdonalds huge brand name,
these things are hard to measure but they have value)**people are the
problem
◍ Separation of ownership and control: Issues in Corporate Management "P-A
GUIDE 2026 FULL QUESTIONS AND
SOLUTIONS GRADED A+
◍ Multiple Stakeholder view.
Answer: says there are other stakeholders besides just shareholders because
they only provide one type of resource. you need to pay attention to all
stakeholders that provide a resource too-this is a more holistic approach but
you can't please everyone
◍ in Multiple Stakeholder view Organizational performance is evaluated.
Answer: evaluated relative to the preferences and desires of stakeholders
that provide resources to a firm- Stakeholders= customers, labor,
management, top executives, suppliers, partners, equity holders, and society
at largebut there are conflicting performance assessments• E.g.food
consumers want low price but nutrition, safe andenvironmentally produced
foods, while food stockholders (managers) prefer high stock returns-
Typically, firms focus on key stakeholder groups and ignore the rest
◍ strengths/weaknesses of Multiple Stakeholder view.
Answer: • Strengths- Closest to definition of performance• Value creation
from diverse resource contributions - Use of diverse measures• Limitations-
No single measure is adequate- Difficulty to implement a coherent strategy,
asits performance differs pending on perspective of stakeholder group
◍ In the article titled Obama attacks the healthcare industry, the individual
mandate requires that all
U. S. citizens must purchase health care insurance. Is this mandate
consistent with the goals of a perfectly competitive market, agree or
disagree, explain. You need to think about competitive markets in terms
beyond its market structure.
, Answer: I don't agree that it is consistent— Perfectly competitive markets
require no government intervention— individual mandate violates this—
competitive market is based on voluntary exchange, individuals have the
freedom to buy/sell what they want— this is violated since he is mandating
which makes it not free market process
◍ ($15 wage) As agribusiness is influenced by political intervention, what are
the longer term implication of a "$15 mandate" on the food retail industry
and that of its workers?.
Answer: higher costs of foodlayoffs
◍ Simple Accounting Measures (SAM).
Answer: • Accounting measures of performance available from annual
reports- simpler because it has numbers- Based on historical firm
performance (financial statements: I/S, B/S, C/F)- E.g. Profitability ratios•
ROA, ROE, P/E ratio etc (Table 2.3, 33)
◍ In class we applied the SCP framework to "OPEC oil cut" case and found
that a reduction of oil is likely to generate a greater performance for the oil
industry than the grain / ethanol industry. This prediction is based on a
particularly strong assumption. Identify and explain what this assumption
is? Express this assumption mathematically also. Again, please write out the
variable names in full when presenting this mathematical assumption..
Answer: The assumption is that we assume all firms are homogeneous
(product the same)Each firm produces on average the same amount q=Q/n
◍ Limitations of SAM.
Answer: - Discretion in reporting of accounting information- Falsifying
Profit performance: different methods to value revenue, inventory,
depreciation- often accounting scams in big public companies - Fails to
value intangible resources E.g. human and knowledge capital, trust,
goodwill, brand awareness (doesn't measure mcdonalds huge brand name,
these things are hard to measure but they have value)**people are the
problem
◍ Separation of ownership and control: Issues in Corporate Management "P-A
